Small Businesses Feeling More Optimistic But This is the 17th Month in a Row Below the 49-Year Average
There are over 30 million small businesses in the United States, according to the Small Business Administration and small businesses comprise about 99% of all U.S. businesses. Further, about half of all Americans – 48% – are employed by small businesses, meaning almost 60 million employees in the U.S. work for a smaller company.
Small Businesses Feeling More Optimistic
On June 13th, “the NFIB Small Business Optimism Index increased 0.4 points in May to 89.4, which is the 17th consecutive month below the 49-year average of 98. The last time the Index was at or above the average was in December 2021. Small business owners expecting better business conditions over the next six months declined one point from April to a net negative 50%. Twenty-five percent of owners reported that inflation was their single most important problem in operating their business, up two points from last month and followed by labor quality at 24%.
Key findings include:
- Forty-four percent of owners reported job openings that were hard to fill, down one point from April and remaining historically very high.
- The net percent of owners raising average selling prices decreased one point to a net 32% (seasonally adjusted), still an inflationary level but trending down.
- The net percent of owners who expect real sales to be higher deteriorated two points from April to a net negative 21%.”
Job Openings Still Hard to Fill
Further, as reported in the NFIB’s monthly jobs report:
- Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 19% planning to create new jobs in the next three months.
- Overall, 63% of owners reported hiring or trying to hire in May, up three points from April.
- Of those hiring or trying to hire, 89% of owners reported few or no qualified applicants for their open positions.
- A net 41% of owners reported raising compensation, up one point from April.
- A net 22% plan to raise compensation in the next three months, up one point.
- Ten percent of owners cited labor costs as their top business problem.
- 24% said that labor quality was their top business problem.